Retirement Plans in the U.S./ Carlos Pueblo

Retirement Plans in the U.S./ Carlos Pueblo

I have always enjoyed discussing the retirement plans in the U.S. which I

have considered as a comprehensive, fair, and considerate. I am one of

the beneficiary of such plans in a defined benefit plan, a HR-10 plan, a

traditional individual retirement account, and a 401k account, of course,

including a social security insurance plan. Almost all the retirement plans

are funded by the contribution of the individual except the defined benefit

plan which is gradually diminished nowadays.

I started to withdraw my defined benefit plan at 55 with my last employer

for $202 a month. This amount helped me to make up my decision to withdraw

my social security benefit early at age 62 for a discount amount. I figured if I

would live up to age 85, I can come out ahead of a lump sum distribution, on

the other hand, I may lose some on the social security; however, I can make up

the loss by postponing the other withdraw of pension plans. Most of the employers

of the U.S. don’t provide the defined benefit plan, instead, they provide a 401k

plan to replace the old defined benefit plan in order to save the cost.

I contributed 10% of my gross income to the previous employer which also provided

the small defined benefit plan. The employer also provided additional 4% contribution

to that plan with a 4 years clause in order to be your money. In addition to that, the

company set up an additional annuity plan for you to contribute 13% after tax fund.

This employer is very considerate for the retirement of the employee. Actually, the

employer does not contribute much for such retirement plan at all; however, this plan

help me very much in the future of my retirement portfolio. My 10% contribution was

before tax and subject to income tax deductible. 13% annuity contribution is not subject

to tax deductible yet the annual gain and appreciation is sheltered till the withdraw.

As a self-employed proprietorship, I have contributed to a Keogh Plan, a HR-10 pension

plan, later I transferred to a ro-over individual retirement plan, IRA. This plan I contributed

25% of my annual adjustable gross income and subsequently received the tax deductible

with the same amount. This account has been grown amazingly even helping me to support

both of my children to finish college education, of course, IRS allows me to withdraw  the

necessary amount periodically until age  59.5. I stop to withdraw at that age and shall return

to with draw at age 70.5 according to IRS rule.

The way to financial independence is working and saving. The working and saving requires

a good education, a good philosophy of your life and a good retirement plan.